I’ve recently come to understand “just how complacent” the general investment community is up in Canada. Now don’t get me wrong – I am an extremely proud Canadian. I love Canada as anyone so fortunate to have been born in Canada “should” love Canada. However…….
A recent article outlining the current “debt to income situation” in Canada, coupled with the recent “decline in housing sales” and recent rise in interest rates juuuuust might confirm what I’ve been fearing for some time.
The headlines continue to suggest an improving economy, and it appears that the vast majority of Canadians are still living under the guise that “nothing could possibly go wrong in the Great White North”.
I’m looking ahead to Canadian Dollar weakness….as well offer you some “additional reading” below the chart. Interest rates on the rise with the ratio of debt to income – not looking so great.
The US dollar has fallen vs CAD for the past 2.5 months! I’m watching the 1.2458 number ( a double bottom / area of support looking back to the big green candle there in April ) for the fall to stop – USD to move back to the upside.
Expecting Double Bottom in USD/CAD
Some time ago, Deutsche Bank’s chief international economist, Torsten Slok, presented several charts which showed that “Canada is in serious trouble” mostly as a result of its over reliance on its frothy, bubbly housing sector, but also due to the fact that unlike the US, the average household had failed to reduce its debt load in time. Read more below….and take it for what it is. Canada “reality check” most certainly on the horizon.
Anyone who hasn’t already learned their lesson “this summer” can simply file it away for next year. You’ve learned something right? You’ve learned that you just can’t “make” markets move…no matter how badly you are scratching to hit those buttons! Markets suck during the summer, and I don’t care what anyone else has to say about. I know. I continue to survive – picking my shots when most likely to see reward….staying out of trouble when volume is low.
Summer is no time for big moves / big trades or big expectations. Take it. Learn from it…and consider yourself a better trader.Done deal.
Looking ahead….as much as it pains me to admit it…..this thing continues to pull in retailers at an incredible clip, and has every likelihood of blowing expectations “TO THE UPSIDE”.
All the pieces are in place really….as I receive more and more inquiries from old friends across the planet asking me for investment assistance “scared shitless” that they’re gonna miss out – as their broker just called with another hot deal.
All the makings of one incredible “blow off top / blast for the stars rip” as the last of the retail gang get’s off the couch with their 2k nest eggs. Sad in a sense as……these poor folk are very often buying the top and unable to act quickly enough to book profits before the fall. Seeing it s many times in the past…..it’s a cycle and it ALWAYS repeats.
I got bumped ( obviously ) on the last lil trade with The U.S Dollar ‘s continued fall. Certainly didn’t expect another daily cycle down, but that should be the last before both USD and U.S Stocks pop to the upside.
Charts? I got nothin……short of wishing I could chart my continued boredom / lack of participation vs some idiot out there pushing buttons all summer. Profits dick-head? I think not.
I will plow you in the face – the next dumb ass giving me a hard time in the comments section believe me. I’ve gotten on planes to “make things right” for a lot less.
Cool your jets kiddies….I’m back, and will be lighting it up again here shortly.
Well well well…..it looks as though USD has finally, FINALLY found its bottom.
I can pull out a number of fantastic correlations / trades in the currency market ‘specific to USD’ but at this point in time…..the general market movement / usual correlations will be saved for another day – as we’ve all seen a number of these fall apart as of late.
Gold has fallen consistently “with” USD which in most cases makes no sense, tech stocks have been clobbered and considering the buoyancy in markets in general….have NOT been actively participating.
EUR/USD pretty straight forward here: SAFE TO SHORT
safe to short EUR
Markets continue to trade in “good ol summer fashion” leaving most traders scratching their heads looking for direction.
It’s nuts out there! You know it, I know it.
You’d think an intermediate bottom in USD would send Gold decidedly lower…but even there….gold has landed near an area of support so…..we’ve got some “rotation” going here, and need to take the time to figure out – WHERE IS THE MONEY GOING NEXT?
Risk trade in AUD/JPY would appear to have hit resistance but…..nothing to write home about.
Risk Trade in AUD/JPY
It “almost looks to me” like a bottom in USD might amount to more U.S stocks being sold, and in turn US dollar reserves moving higher, while gold stays flat but….that’s pure speculation.
We need another day er two to see how things unfold from here. I’m short EUR/USD – and that’s it!
Step away from your computer for a couple of days and BAM!
Stocks peaked out on day 21 of their cycle, and the USD bounce just turned into a “USD crater”. Stocks could easily fall much lower over coming weeks so…
I wouldn’t think much of it considering that nearly ever single time stocks take a little break…they have generally popped back up in but – THIS TIME? The intermediate cycles have been so extended, the counts have been very difficult, but with today’s action coupled with the massive “profit taking event” in tech stocks some weeks ago?
Don’t go looking to buy a dip here! DO NOT GO HUNTING FOR A BUYING OPPORTUNITY!
If this is indeed the long-awaited “mini crash / intermediate decline in stocks” it will take weeks, and quite possibly roll over into yet another failed daily cycle pushing things lower for weeks “after that”.
It’s far, far to early to even consider this a buying opportunity, as you should have been looking at these past few months as selling opportunities anyway right?
I’m dumping my crappy “short MUX / summer play on Gold” and otherwise have “zero skin in the game”.
USD falling thru here very surprising so I am 100% out ( perhaps with a tiny profit ) first thing in the a.m.
Sorry….the sun is out, and as stated many many weeks ago……I’ve no time for this now. It’s a waste of my “oh so valuable time”.
I’m bored. You’re bored too.
The summer grind is certainly “doing its thing” so a quick update on my trade activity will have you rolling your eyes. “Common Kong! – Give us something to trade man! You’re killing us here!”
Just stay short Gold and related names…..as the move hasn’t really even happened yet. Stay long USD as again…..these last few days / weeks have generally traded flat asa pancake but an intermediate decline in Gold ( and subsequent rally in USD ) is the only thing worth looking at here short/medium term.
I’ve added to my short play on MUX ( as a cheap gold short nothing more ) and am still holding short EUR/USD.
It’s boring as hell…but these trades will materialize in a more significant manner here shortly….all you have to do is be patient.
As you all know I have been actively following Canadian Marijuana companies….with thought in mind – this is very similar to the “good ‘ol days” when I got intrinsically involved with online gaming “prior” to the global phenomenon.
For kicks you all can go rent the movie “Runner Runner” starring Ben Afleck and Justin Timberlake for a very real account of my experience those 7 years in Costa Rica. The movie documents our company / story almost to a tee – right down to the alligators, “the ladies” and the lifestyle.
Wild times to say the least.
Now looking at my position in ACB ( Aurora Cannabis ) with potential merger on deck with Hemp Food and Fiber (HEMP) – both of which recently making nice pullbacks and looking to bottom here with stock trading “halted” here this morning….I can’t help but wonder…
Could I seriously hit this again? Is this the beginning of an essentially “brand new industry” and these stocks will never, never see levels anywhere close to this ever, ever again? No moss growing on ‘ol Kong eh? Eh? I’ve started a simple newsletter that is “pot specific” if you are at all interested. I’ll plan to mail out maybe once or twice a month as things progress.
Otherwise….cheapest short gold play I could find – I shorted McEwan Mining Co. (MUX) yesterday afternoon at 3.77, and it looks like the USD / EUR ? Gold call is hmmm…….bang on the money?
Get in here and comment / chat it up people. Some great stuff flying back and forth here during the day. My posts are just posts.
Kong’s Got Weed
Personally….I rarely look at this pair as any, “ANY indication” of larger market moves or global appetite for risk as – these are they two most widely held reserve type currencies on the planet, and their comparable movement does nothing for me / my analysis or for the most part….my account.
The general “forex media / forex industry” promotes the trading of this pair like there’s no tomorrow, and new traders tend to love it. Don’t ask me why. Well ok ask me why…..cuz they don’t know anything about forex before they start trading it!
So if the coming move in forex markets “in general” can be at all illustrated for you “new comers” via this pair – take a look at the weekly chart of EUR/USD:
Resistance Ahead For EUR
See that big red candle back near the first part of October? The one with the tall “wick” on it? High of 1.1305? Then looking back…..see the confluence area surrounding this price level “rough and nasty”?
Now check Gold:
Resistance For Gold
Support For USD
These are the kinds of “large time frame” areas of support and resistance where you can start considering some “serious” trading . Not getting bogged down in the short-term flutters, if you can just manage to keep your friggin hands off the mouse for a day er two!
Not much more to be said here. You know what I’m getting at as this trade is getting very close.
It’s the “knowing ahead of time” and the “recognition” that these levels and correlations exist that will elevate your short term trading as you should “already know” the levels to watch for reversal. THEN pop down to your 1H charts and plot your entry.
Eur set to top. Gold set to top. USD set to bottom for a solid “medium term trade” so……start eyeing these charts for their reversal on the 1H at the bare minimum before even considering entry.
You owe me big time.
I don’t have a lot of time this morning but wanted to let you know…..
Gold is looking like a “top” as The U.S Dollar is “slowly” ( very slowly ) putting in a medium term bottom.
I tried to hit this trade a week er two ago…but the cycles are extended, and the trade treaded water too long for me to care/stick around. I dumped broke even…and spend the time out playing in the sand.
This is very much so “back on my radar” as….the big spike in gold and the continued pressure on USD is setting up for something “worth trading”.
Find some levels people. Look at a few longer term charts of gold, eur/usd and USD in general (weekly charts ) and you’ll see that we are very close to an area of resistance in gold, and support in USD.
Tell me you see it…..tell me you look at these longer term charts to find areas worth trading. If not….don’t tell me anything. You’ll get smoked in this environment solely looking at short-term action. Short term is “grind your account into dust” type action no?
On an aside….Aerospace entrepreneur Robert Bigelow just did an interview on 60 minutes, stating that he is “absolutely convinced of an ET / alien presence on Earth. That’s all there is to it.”
No shit sunshine….I’ve been here for 1000’s of years.
Trade setting up for Kong….just not today.
As per my previous post – I have absolutely “zero expectations” for the next few weeks / months of trading.
I’ve seen this kind of market activity many, many times in the past. Dead money just sitting there doing nothing. Staring at it……not the way I choose to spend my days. Now, there is always the possibility that things may change…some major news event, or large-scale geo political scenario where markets react but seriously……in the current environment, the “Trump environment”?? One can only assume something impactful leading to further “downside” if anything.
This “summer thing” is for real, and rightfully so. People are out throwing frisbee’s with the dog – not hunkered down in some dingy basement pouring over charts.
Best recommendation I can make for trigger happy traders – keep a close watch for news / anything that “might” provide opportunity to move the needle but otherwise..take this down time to do two things:
- Practice your entries on a one hour chart.
- Continue study on “macro markets” as opposed to “day to day activity” in a single market.
The one hour chart is where I generally make my entries “after” I’ve established a reasonable area of both “price and time” to do so. This generally dictated by daily cycle counts.
Getting a handle on “how this entire thing works” is extremely valuable. Once you’ve included Japan in your analysis, currencies and their roles on a global perspective “and” the relationship with bonds / stock prices and gold. You’ve got a very good platform to form your trade analysis.
If you only approach this as a technical exercise ( trading that is ) …..unfortunately you’ll struggle longer term.
I’m cashed out, short of small holdings in ACB ( Aurora Cannabis ) having blasted out my few “USD long trades” entered some days ago – flat / break even / boring as hell / stuck in the mud.
I don’t waste time on this, when markets go on holidays.
I’ll make this short and sweet.
Just because you’ve got your fancy new monitors set up, and all your charts / bells / whistles / lights ‘a flashing – doesn’t mean you’re gonna find a trade. Human nature would have it that you “expect” amazing things to happen. You’ve got all the tools, you’ve even gone a little overboard on that “extra screen” and you’re hell-bent on sitting down every morning at your trade terminal, and conquering the world.
Sorry buddy…ain’t gonna happen.
I can’t tell you how many times in the distant past I was 100% completely “jacked” to jump on into markets based on some over night news release, or some new article I’d found. Like a kid on Christmas morning I’d be up well before the crack of dawn, hardly able to contain myself sitting there in dark waiting……waiting…waiting for that opening bell.
Then summer came along and spoiled the party.
Hours on end sitting there staring at charts now frozen. Pacing the floor in anticipation of “hitting my exit” only to find the trade moving sideways for days……then days ‘n days more. Finally one year it got so bad that I almost gave up. I just couldn’t understand. There it all was right in front of my face…lights flashing, news running, bing bing – bam bam! Let’s do this!!
ZZZ zzzz zzzz…….zip…nada..zero – nothin.
You can’t make markets move, and as much as it’s a difficult thing to do when you’re just so excited to just get in there and kick ass…you’ve got to understand.
There is a time to step on the gas, and there are times to pump the brakes. Summer has arrived baby.
Get ready for whole lot o’ nothin.
empty trade terminal